Circular Flow Model Vocabulary

What is the Circular Flow Model a visual representation of?

• The interactions between households, firms, and the government in an economy

• The interactions between different countries in the global market

• The flow of water in a circular pattern

• The movement of planets in the solar system

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DOK Level 1: Recall

In the Circular Flow Model, who provides labor to firms?

• Firms

• Households

• Government

• Banks

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DOK Level 1: Recall

What do firms produce to sell to households?

• Labor

• Goods and services

• Taxes

• Regulations

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DOK Level 1: Recall

Where do households sell labor and other resources to firms?

• Product Market

• Resource Market

• Stock Market

• Black Market

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DOK Level 1: Recall

What is the market called where firms sell goods and services to households?

• Resource Market

• Product Market

• Labor Market

• Capital Market

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DOK Level 1: Recall

What term describes natural resources used to produce goods and services?

• Labor

• Capital

• Land

• Entrepreneurship

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DOK Level 1: Recall

Which of the following is NOT considered a natural resource in the context of 'Land'?

• Minerals

• Water

• Forests

• Computers

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DOK Level 1: Recall

What do firms pay households for in the Resource Market?

• Goods and services

• Labor and other resources

• Taxes

• Loans

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DOK Level 1: Recall

What do households spend their income on in the Product Market?

• Labor

• Goods and services

• Taxes

• Investments

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DOK Level 1: Recall

Which of the following best describes 'Labor' in the context of the Circular Flow Model?

• Natural resources used to produce goods and services

• Human effort, both physical and intellectual, used in production

• Machinery and equipment used in production

• Financial capital used to start businesses

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DOK Level 1: Recall